Our client is a leading manufacturer of health care products for women. They were bringing a product that had previously been prescription-only into the Over-The-Counter arena. Initially, the plan was to price the product at parity with similar competitive products. However, marketing management wondered if, because they were such a prominent manufacturer with strong brand equity in a related category, they could charge a premium for this product.
Originally planned for $3.99 per package, we tested four additional prices – $4.99, $5.99, $6.99, and $7.99.
The product rolled out at $5.99 and came within a few percentage points of the Year 1 sales forecast. This research let our client make $2.00 per package in EXTRA profit.
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